The Connecticut Senate has passed legislation that would expand the state insurance commissioner’s authority over health insurance rate approvals, introduce new restrictions on step therapy and limit insurers’ ability to deny reimbursement for general anaesthesia based on time constraints, according to a report from AM Best.
Senate Bill 10 would allow the commissioner to reduce a proposed rate increase by up to two percentage points if a carrier’s average approved rate hikes over the previous two years exceeded the state’s healthcare cost growth benchmark. The provision would apply to individual and small group plans covering up to 50 employees.
Current law directs the Connecticut Insurance Department to review rate filings to determine whether they are excessive, inadequate, or unfairly discriminatory. The bill would add “unaffordability” as a factor in the rate review process, according to the report.
In written testimony, the department supported the inclusion of affordability but expressed concern that SB 10 could create conflicting outcomes without guidance on how to resolve that conflict.
Jim Carson, legislative director for the department, said a separate proposal backed by Governor Phil Scott offers a more consistent approach. Under that bill, the department would maintain its existing review process but include an additional step allowing the commissioner to assess whether a rate is affordable. If a proposed rate exceeded the benchmark and was deemed unaffordable, the commissioner would have the authority to impose a two percentage point reduction.
Carson said the ability to adjust rates based on affordability could encourage insurers to negotiate lower healthcare costs with providers.
SB 10 also prohibits insurers from denying or reducing reimbursement for general anaesthesia solely because a procedure exceeded a predetermined time limit. The bill bars carriers from imposing such time-based limits in cases involving medically necessary care.
In addition, the bill would restrict the use of step therapy for medications used to treat multiple sclerosis and rheumatoid arthritis. It would also remove the expiration date on an existing step therapy prohibition for drugs prescribed for mental health conditions.
Other provisions in the bill establish new reporting requirements aimed at monitoring compliance with mental health parity standards. The legislation would give the commissioner authority to issue civil penalties against carriers that fail to meet those standards.
Separately, Insurance Commissioner Andrew Mais said the department is continuing efforts to sell all or part of the business of PHL Variable Insurance Co. as part of an ongoing rehabilitation process.
